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dc.contributor.authorSmith, John Tindall
dc.date.accessioned2010-09-19T23:36:26Z
dc.date.available2010-09-19T23:36:26Z
dc.date.issued1979
dc.identifier.urihttps://hdl.handle.net/10182/2551
dc.description.abstractTwo price quota arrangements have been recommended by economists since 1960 as a second best method of reducing the social cost of protecting Australia's dairy industry. Recent experience, however, with prolonged deliberation and debate in the National policy forum on the practical aspects of implementing a two price quota scheme recommended by the Industries Assistance Commission in 1976, indicates that there are very real complexities involved in applying the theory of two price quota schemes to the Australian dairy industry. The I.A.C. Mechanism involved setting a National Quota which would be allocated to farmers. For production up to quota farmers would be paid a higher price than that for production in excess of quota. Domestic prices would be maintained by a system of levies on domestic sales and the proceeds of these would be distributed on farmers' quota. A problem with the mechanism was that uncontrolled revenue transfers between product groups could occur and attempts to overcome this problem lead to the development of two alternative plans. The first alternative, the Inter-Pool Transfer Plan, was based on controlling revenue transfers between product groups to obtain the desired policy objective while the second option, the Separate Product Pool Plan, aimed at eliminating revenue transfers altogether. The analysis undertaken in this study demonstrates that the problems which arise, would make both plans fairly difficult to operate. The need to cover all dairy products with levy arrangements to protect domestic prices and the possibility of more seasonal milk production are examples of the problems that arise under the above plans. Many of the problems are caused by the complex and multi-product nature of the dairy industry. Another option, which was developed by the author, constitutes a unique approach to the problem of implementing two price quota plans. The proposal, the Over-Entitlement Levy Plan, was at one stage accepted for implementation in the Australian dairy industry. The basic premise of the system was that if for the purposes of implementing two price quota plans the industry could be treated as a single product industry, then it should be relatively simple to implement a two price quota arrangement. It was suggested that product levies should continue merely to preserve the domestic price structure of selected dairy products but to implement the two price scheme, a separate tax would be imposed on milk produced in excess of entitlement. This tax would be designed to indicate to farmers that milk produced in excess of entitlement would be less valuable than entitlement milk. The analysis in this study shows that the Over-Entitlement Levy Plan would be the easiest plan to implement and overcomes many of the difficulties that would be created with other plans. Nevertheless two price quota arrangements are likely to be more expensive to administer than the existing marketing arrangement of equalisation and it could be that possible benefits through improved resource allocation to dairying may not offset the added cost of a two price quota arrangement.en
dc.language.isoenen
dc.publisherLincoln College, University of Canterburyen
dc.rights.urihttps://researcharchive.lincoln.ac.nz/page/rights
dc.subjecttwo price quotaen
dc.subjectdairy industryen
dc.subjectAustraliaen
dc.subjectNational marketing arrangementen
dc.subjectleviesen
dc.titleLevies on over-entitlement milk as a method of implementing two price quota arrangements in the Australian dairy industryen
dc.typeThesisen
thesis.degree.grantorUniversity of Canterburyen
thesis.degree.levelMastersen
thesis.degree.nameMaster of Agricultural Scienceen
lu.thesis.supervisorZwart, A. C.
lu.contributor.unitDepartment of Accounting, Economics and Financeen
dc.rights.accessRightsDigital thesis can be viewed by current staff and students of Lincoln University only. Print copy available for reading in Lincoln University Library. en
dc.subject.anzsrc140201 Agricultural Economicsen


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